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The purpose of this study was to find out the challenges and opportunities of developing and operating multiple fast-food restaurants under an area development agreement. The goal of this thesis work was to identify the issues a prospective franchisee has to be aware of in order to successfully manage his mini-chain.

The information for this thesis was gathered from literature, the Internet and by interviewing Russian area developers of different fast-food chains. The empirical data for this study was collected by interviewing companies’ representatives in person and by conducting video conferences in Skype.

The results of this study indicate mainly the same issues that were expected to be found. These involve propositions concerning allocation of units, proximity of outlets, free-riding problems, uniformity of products, transfer of knowledge and local advertising practices, which were supported. The proposed agency problems were not found in the interviewed companies. Likewise, contrary to expectations, bulk purchase for multiple outlets is not what companies did to achieve economies of scale in procurement.